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The site where the palace is located has been gazetted for such purpose in 1976, and numerous contractors have been involved with the initial planning. The need for a new palace, according to the then-Works Minister Samy Vellu, has been pressing due to space constraints in the old palace. The Balai Rong Seri (throne room) of the old palace was also been used as the dining and meeting rooms. The site is 96.52 hectares and situated on a hill, of which according to Malaysian Public Works Department (JKR) director-general Dr Amer Hamzah Mohd Yunus, only 28 hectares will be used for the development of the palace complex.[2]

Construction began in November 2007 and cost RM812 million to build.[3] The complex incorporates Islamic and Malay architectural elements, following designs by architect firm Kumpulan Seni Reka Sdn Bhd and built by construction firm Maya Maju Sdn Bhd. The palace complex was slated for completion in 2009 but was only completed in September 2011.[2]

The royal household began moving its operations to the new palace complex in phases beginning 19 October, ending with a flag-raising ceremony on 15 November.[4]